The Carphone Warehouse today announced strong third quarter (Q3) trading update for the thirteen weeks to 30 December 2006.

A strong trading performance saw retail revenues up 19.8% to £571.3 million. Like-for-like revenue growth was 7.3%, driven by higher like-for-like connections and like-for-like gross profit growth was 3%.

The company said initial customer response to the launch of Best Buy Mobile, its new US mobile retail format in conjunction with Best Buy, had been promising and that the trial will continue over the coming months.

Total fixed line revenues were up 104% to £286.5m. It said that, by the end of the quarter and with the completion of the AOL acquisition, its UK broadband base had increased to 2.16 million customers, making TalkTalk/AOL the number three operator in the UK broadband market.

The TalkTalk broadband base rose to 632,000, including 540,000 live on the new offer. Carphone said the rate of growth reflected a continued major focus on provisioning and customer service processes, as well as the normal seasonal slowdown as its Retail business prioritised Christmas trading.

At the end of the quarter, 413,000 of its broadband customers were on unbundled lines, comprising 132,000 TalkTalk customers and 281,000 AOL customers. “We plan to increase the rate of unbundling materially over the next few weeks, but we continue to be reliant on the quality of the line migration process to minimise customer disruption,” it said.

Chief executive Charles Dunstone said trading and margins were in line with expectations. "We have had another very good Christmas period,” he said. “The completion of the AOL deal…gives us the scale we need to deliver significant profitable growth in the medium term.”

The company’s next trading update will be on 24 April 2007